OREANDA-NEWS. Global refinery throughput growth will slow in the second quarter, following a strong first quarter performance, the IEA said in its latest monthly Oil Market Report (OMR).

Global runs are estimated to rise by 700,000 b/d year-on-year in the second quarter, led by Saudi Arabian and Indian refineries. Throughput climbed by an estimated 1.5mn b/d year-on-year in the first quarter, an upwards revision of 200,000 b/d from last month's IEA estimate.

The expected slowdown in second quarter throughput growth partly reflects concerns surrounding US refineries. The IEA now expects the US to see its first quarterly year-on-year throughput reduction for four years in the second quarter. Spring maintenance was expected to peak in March, but more capacity was offline in April because of restart issues and crude pipeline problems. Scheduled maintenance in May, along with the impact of Canadian wildfires, have further weakened the US' second quarter outlook. Lower US refinery runs should result in a good gasoline arbitrage opportunity for European refiners.

Saudi Arabia and India both processed monthly record crude volumes during the first quarter of 2016: Saudi Arabia's February throughput reached 2.7mn b/d, up by 600,000 b/d year-on-year, while Indian runs reached the 5mn b/d mark for the first time in March. China's March runs reached 10.6mn b/d, giving a year-on-year growth rate of 0.5pc. China's independent refiners increased their runs by over 500,000 b/d year-on-year in the first quarter, but their second quarter growth is expected to slow as they start maintenance delayed from last year.

Global crude margins performed well in April despite the oil price rally, largely supported by gasoline premiums. Northwest European gasoline cracks almost doubled in April from the previous month, to $14/bl, while in US cracks rose by $5/bl. Singapore was the only main region where crude margins fell, weakened by excess supply.